State-run stocks due for re-rating: Morgan Stanley

An employee fills diesel in a public bus at a fuel station in Kolkata August 13, 2012.

Reuters/Rupak De Chowdhuri/Files

Reuters Market Eye - Shares of state-run companies are due for a re-rating, Morgan Stanley said in a short note on Tuesday.

The investment bank says these public sector stocks are trading at multi-year low valuations against the MSCI India index and would also benefit from an expected shift to cyclicals over defensives in coming months.

Morgan Stanley adds the government's proposal to create an ETF for public sector stocks would also be a positive.

(Reporting by Abhishek Vishnoi)

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